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HomeMy WebLinkAboutCOM 0923.003 2014-2016 PJfc, LoL4M.G23 Jeffrey Melrose Island Planning 1405 Waianuenue Ave Hilo Hi 96720 July 18,2016 Chairman Karen Eoff and Members of the Committee z, Finance Committee " Hawaii County Council p:� County of Hawaii • Subject: Comments on Bill 218 DI and Bill 219 D 1 Thank you for the chance to testify. Bill 219 Bill 219 is a limited effort at reforming the County's agricultural tax program, actually, in my view, more tinkering than real reform. There are,however,pieces of Bill 219,particularly the additional clarity on the roll back tax time frames that should continue to be part of this Council's consideration. I would also like to acknowledge Councilman Ilagan for making an effort to reach out and talk to various people in the ag community about his bill before submitting it, something that has been missing in the ongoing discussion on ag tax reform over the last several years. This bill inserts statutory language requiring the Tax Office to inspect all non-dedicated ag properties every ten years. To truly stem abuse, I think that 10 years is too long,but I'll leave that to the Council to discuss. My bigger issue is that this bill and Bill 218 both leave the primary responsibility for enforcing the code in the hands of the County and its tax office employees. I would prefer to see that burden shifted to the landowners who wish to take advantage of reduced tax payments in return for sustained agricultural efforts.Non-dedicated landowners particularly should have to resubmit and prove their eligibility for beneficial tax status rather than to put the burden on the tax payer to pay for the inspections of often remote, gated and guarded properties island wide.The County Water Department operates on this principle for their agricultural water use rates, and a similar system should be explored for real property tax benefits. Bill 218 This bill goes much further towards real ag tax reform and would be my preference for a platform to move this discussion forward. The bill reflects some significant changes from previous bills from Council person Wille and we should acknowledge her work in this area. In my professional opinion,the biggest issue with our existing law is that the there is almost no tax incentive for a landowner to make an extended, dedicated commitment to stay in active ag use if they can sign up instead under a non-dedicated program that grants them almost the same financial incentives as they would get in dedication. For that reason, 90%of the parcels in the current County ag tax program are in the non-dedicated program and only 10%have made any kind of sustained commitment to continue farming or ranching. Real ag tax reform will broaden that value difference between dedicated and non- Comm. on- Com. No. Qa3 , 3 Ref. To: P 1 rr Ref. Dote JILL 1 8 2016 dedicated ag, and grant the best benefits to committed farmers, and something far short of that for those who want to be in a year to year program. In your review of Bill 218,I would ask that you look closely at the following points and arrive at your own decision. • In Bill 218 the proposed assessed value for non-dedicated parcels after 2018 would rise to 70%of Fair Market Value. Keeping in mind that market values vary greatly depending where you live on Hawaii Island, I urge the Council to get good numbers from the tax office before you make a decision to better understand the real impacts of this new valuation and who gets hit hardest by it. I think you will want to negotiate this value downward. • The new three(3)year short term ag dedication program in Bill 218 is a step in the right direction but I think the three year term is too short. You might want to consider a five(5)year period as more appropriate for most kinds of commercial agricultural land users. • Bill 218 has not been fully vetted with a broad slice of the ag community and I would encourage the Council to make sure that whatever provisions are considered, receive much more vetting with representatives of farmers, ranchers and landowners who will feel the impact the most. In closing I would like to make two quick points: 1. There is significant difference in valuation and crop mix between different regions around the County. I encourage each of you to get good information on how this bill will impact your region and use that insight to help shape the solutions you come to as a Council. 2. This issue is more than just about agriculture;there is an important element of land stewardship and open space management that should be part of the conversation. Unmanaged land is a liability both for the landowner and for the public. Un-grazed pastures of guinea grass present as a significant fire load and need to be managed to preserve public safety. In addition,unmanaged land in some regions quickly becomes albizia forests or christmas berry, ironwood or guava thickets. The ag land tax system should be mindful of these threats and help to incentivize landowners to step up to manage these issue before they become an issue for community health and safety. Thank you for the opportunity to submit testimony on this matter.